Data Centres

1. Deputy Pa Daly asked the Minister for Climate, Energy and the Environment if he will report on the demands data centres place on Ireland’s critical infrastructure and the plans to increase this demand; if he is satisfied with our infrastructure’s ability to withstand this increased demand; the way in which this will be paid for; the contributions data centres have made to finance existing and increased demand; his views on whether access to this infrastructure should operate on a first come, first served model; and if he will make a statement on the mater. [65942/26]

This question is about data centres and the demands being placed on the grid. We introduced a Bill yesterday about the prioritisation network. Can the infrastructure that we have withstand the increased demand coming from data centres? Will the Minister accept that public infrastructure should be given priority for housing, water connections and electricity to deal with the scarce grid capacity ahead of the new data centre developments?

Ireland's industrial electricity demand is primarily concentrated in our digital economy. This is our core energy-intensive industry. Data centres are fundamental to Ireland's position as a leading global hub for digital and technology-driven enterprise. They form a critical part of the State's digital infrastructure, supporting activities including cloud computing, artificial intelligence, financial services and public sector digital services. Their economic footprint is substantial with €104 billion in gross value added - that is about 20% of Ireland's economy - enabled by data centre-dependent sectors. Approximately 183,000 people are working in Ireland's technology sector with around 19,000 jobs directly in the data centre industry. While Ireland has attracted some of the best data centre and tech companies in the world, the integration of large-scale demand on our grid must be facilitated in a sustainable way. The Government's large energy user action plan, LEAP, will progress a plan-led approach for future energy-intensive industry which will unlock investment and innovation in Ireland's renewable energy sector, maximise wider benefits in jobs and skills across Ireland's regions and ensure that the cost of developing additional infrastructure is borne in a manner that is fair. This is being reinforced by unprecedented grid investment of up to €18.9 billion, and that is beneficial to our whole economy and to our society. Alongside LEAP, the CRU large energy user connection policy establishes a sustainable connection pathway for new data centres that manages demand by requiring generation and system support, addressing security of electricity supply and network constraint considerations, and promoting Ireland's renewable energy ambitions by bringing 80% of new energy demand for any new data centre connection through renewable sources.

I thank the Minister for the reply. I note what he says about the economic footprint and the necessity for a plan-led approach. I will come back to that in some of my later questions. However, we have had and continue to have a first-come, first-served, laissez-faire attitude, and some larger energy users have been facilitated in hoarding connections that they have. Some housing developments, like the one in the midlands, that have tried to get connections have been put behind data centres. A significant proportion of the connection queue consists of speculative applications, and communities and other connections have been left behind. The European Commission last December said we need strategic prioritisation of scarce grid capacity. Will the Minister move away from the first-come, first-served attitude?

We have to manage the demand that is there. Ireland's demand will grow and will double between now and 2050. That is why the grid investment programme is so important, and that we improve the resilience, distribution and capacity of our grid. To get to the kernel of the Deputy's question, no housing development has not been connected because of a data centre. PR6, which is our investment programme, outlines all the various things we need to do across the economy and society, that is, the 300,000 new homes we need to build, industrial growth, economic growth and infrastructural projects like MetroLink that we announced yesterday. That will require further electricity demand. We want to drive that through renewables. About 50% of our electricity so far this year has been generated through clean renewable sources. We have doubled our wind capacity in ten years and solar is a major part of our energy mix now as well. That said, however, large energy user demand has to be managed in a planned way and that is what the LEAP does. The large energy user, LEU, final decision from CRU ensures that happens.

A lot of this comes from the admission by CRU that it could not have a prioritisation and had to deal with it on a first-come, first-served basis. At this time, when there are soaring energy bills and businesses are struggling with costs, we see that there are new proposals to give data centres access to cut-price gas infrastructure. The public cannot understand how the Government could justify asking ordinary families to pay more and more for electricity, heating and energy prices while facilitating further subsidies to and preferential treatment of some of the wealthiest and the largest corporate energy users in the whole State. For years we know that ordinary households and small businesses have been shouldering a disproportionate amount of energy taxation, network charges and energy costs, but at the same time the cost associated with expanding and reinforcing infrastructure for large energy users continues to grow. We see the amount of energy in the Dublin area, for example, that the large data centres are taking up. All we are calling for is fairness between the ordinary people who are struggling with their energy bills and the large corporate energy users.

I did make reference to the Bill that Sinn Féin published yesterday. As with any Bill, from wherever in the House it comes, be that Opposition or Government, I will look at it and do so in a positive way. The network charges are set by CRU. From 2020 to 2026, the data centre sector saw an average increase of 175% in network costs. I do not set the network charges; that is just the reality. There is, though, an overall issue of affordability, which I know we will get to during the course of the morning, whereby we see elevated prices right the way across the developed world, including here in Ireland. That is where the work of the national energy affordability task force, which will conclude soon and report to me, is very important. We have to do our best to soften the blow of increases, particularly for households and small businesses, but how we get to a sustainable way of doing so is by accelerating renewable delivery and delivering the infrastructure projects we need, like the North-South interconnector.

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